Jindal seeks to scrap income tax and instead boost sales tax

Thursday

Jan 10, 2013 at 6:14 PM

BATON ROUGE — Gov. Bobby Jindal said Thursday his administration will be pushing to eliminate the state personal and corporate income taxes in exchange for a higher sales tax during this year's regular session.

Jeremy AlfordCapitol Correspondent

BATON ROUGE — Gov. Bobby Jindal said Thursday his administration will be pushing to eliminate the state personal and corporate income taxes in exchange for a higher sales tax during this year's regular session. Convening April 8, the session has been built up by the administration as a vehicle for substantive tax reform, but it wasn't until this week that its centerpiece policy became known. Jindal has said all along he wants a revenue-neutral proposal, meaning the tax swap wouldn't have an adverse effect on the state budget, which carries a $1.2 billion deficit for the coming fiscal year that begins July 1. Citing sources who have met with the administration, the Monroe News-Star reported Thursday that Jindal's plan could increase the sales tax to the 7 percent mark. “We want to keep the sales tax as low and flat as possible,” Jindal said in a prepared statement, without mentioning a specific number for the sales tax. “Eliminating personal income taxes will put more money back into the pockets of Louisiana families and will change a complex tax code into a more simple system that will make Louisiana more attractive to companies who want to invest here and create jobs.”Rep. Gordon Dove, R-Houma, said it's a lofty goal that will certainly heat up the two-month session and possibly bring Jindal national attention. “That's huge,” said Dove, the dean of the Terrebonne-Lafourche delegation. “It's a lot to digest, and I'm really eager to hear the details.” Lawmakers expect to see parts of the overall plan come to light by the end of the month. In an interview earlier this week, House Speaker Chuck Kleckley, R-Lake Charles, said the public will be part of the process as well.“We'll probably have some pre-session meetings where the committees can hear about these proposals,” the speaker said. Jindal added that lawmakers will play a key role, too, and will be kept abreast of the plan. “We are meeting with every legislator over the coming weeks to discuss the details of the tax reform plan,” he said.Dove said the session, which is fiscal in nature since it's an odd-numbered year, will also host other tax proposals. “Among the only things I don't want to see is an increase in personal or corporate taxes,” Dove said. Rep. Truck Gisclair, D-Larose, said he's worried that higher sales taxes would only increase the financial burdens of Louisiana's poorest citizens.“I don't want to hurt the small guy in the name of business,” Gisclair said. “I'm not sure what exactly the governor has up his sleeve, but I have some concerns about that.” Jindal countered that his proposed tax reform would remove “administrative burdens” from families and small businesses and improve Louisiana's business prospects, create more business investment opportunities with increased job growth and raise the state's profile in national business rankings.“The bottom line is that for too long, Louisiana's workers and small businesses have suffered from having a state tax structure that is too complex and that holds back economic prosperity,” he said. “It's time to change that so people can keep more of their own money and foster an environment where businesses want to invest and create good-paying jobs.”Usually in opposition to the governor, Rep. Dee Richard, an independent from Thibodaux, said there's a lot going for Jindal's proposal. “I really like the concept, but now we have to find out about everything else that will be included,” Richard said. “I would imagine that sales taxes will skyrocket. But there's always a tradeoff with this kind of plan.” The question now becomes how lawmakers and the administration would replace the $2.58 billion expected to be raised by the personal income tax and the $340 million anticipated from the corporate income tax this year.The state sales tax, now at 4 percent, should bring in $2.59 billion this year.